The rupee fell past 64 to the dollar for the first time on Tuesday and bond yields spiked to a five-year high before the RBI stepped in to sell dollars, as India bore the brunt of the global emerging markets selloff. Underscoring how hard it is for the government to push through reforms despite the urgency of a deteriorating economic outlook, parliament was adjourned on Tuesday due to protests by members over a corruption scandal.
Later on Tuesday, India was due to hold a $9.3 billion sale of government debt quotas, a gauge of foreign investor interest in local assets. Bankers said that the debt limits at the auction may get taken up, but at rock-bottom prices.
Selling of dollars by the RBI helped the partially convertible rupee recover somewhat to 63.65 to the dollar.